The National Association of Realtors today urged the quick passage of new legislation aimed at making the currently elevated FHA loan limits permanent.
The bill, H.R. 2483, was introduced by committee members U.S. Reps. Brad Sherman (D-Calif.) and Gary Miller (R-Calif.).
“FHA is more important than ever to homebuyers in the present market. In the wake of the collapsing private mortgage market, FHA has played a critical role in removing inventory from the market and stabilizing home prices,” said Boyd Campbell, an NAR spokesperson.
Campbell also called on Congress to add appropriations legislation (money) to help update outdated technology at the FHA, and urged the Senate to pass H.R. 3146, which would allow the agency to hire new staff and consultants.
NAR also wants to eliminate the owner-occupancy requirement so bank-owned properties are not counted, increase or suspend the 30 percent limit on the total units in a condominium project that may have an FHA loan, and reduce or eliminate the requirement that at least 50 percent of units in a project must be sold before FHA endorsement.
“The reason the FHA capital reserve ratio is expected to fall below 2% has nothing to do with FHA’s current business activities. It is simply a reflection of falling housing values in their portfolio,” NAR said.
I’m not so sure about that; in fact, HUD said a while back that it was taking on new losses because of exposure to new markets, which came about with higher loan limits.